US National Debt / Deficit - How does it end?

[zolace]

I have a lot of my own thoughts and fears about where the US national debt is leading our nation and the world. I feel like I’ve done enough of my own studying to have a good understanding of what the likely outcome(s) are but want to get some perspective from other well informed individuals here on bitcointalk.

My conclusion is that the US debt is already so out of control that it will just keep rising until we either default on our loans or we enter a period of rapid inflation as we try to pull a Weimar Republic and print our way out of debt. Maybe someone will contradict this conclusion but I think that the majority will agree that the US financial collapse is beyond preventing at this point even if it is for different reasons than my own.

The real area of interest to me is how does this end? I’ve been reading the book “Patriots” which I believe is the darkest possible scenario for a post economic collapse US. The collapse I am more inclined to believe in is that we’ll face hyperinflation for a short period until the deficit is effectively paid off and during this time our economy will become a basket case. Critical services (electricity, police, firemen, most businesses), communication (Internet, TV, newspapers), and our government will continue to function throughout. The chaos will be at its worst for a matter of months. The worst hit will be the poor who depend on services that may fail such as welfare, food stamps, and other entitlements. There will be regional violence but nothing large scale or long lasting. The loss of life due to things relating to the collapse will number in the thousands or maybe tens of thousands but certainly not millions.

What is everyone else’s view on just how this could play out? Or perhaps are there any who believe this sort of collapse will just never happen?

[giveBTCpls]

The debt is IMPOSSIBLE to pay. They will keep printing and printing and printing until the money magic making machine explodes, aka crash, aka BTC goes several moons. What is fascinating is how long they have keep doing this shit and things are still somewhat normal. We'll see how far does the rabbit hole go.

[umair127]

Well, all these stories tend to end the same...with the country being taken over. I think the more important question is what that timeline is. In my honest opinion, we are probably further out from "the end" to the point where you or I will not be around. With that said, we certainly will have some big declines within the next 20-40 years. Currently 100% of the revenue generated goes towards paying old people, paying sick people, paying interest on debt, and paying people to XXXX up and/or rebuild another country. At the state level, another 25% of the revenue goes towards helping sick people. Unfortunately, you get to a point where you aren't just helping people who need it, you are creating a small work force with a large entitled force. Slowly this degrades the economy, you end up with huge disparities in income, and the nation begins to cave in on itself. Take a look at Greece and most of the EU as an example of where we will be in 20 years. After awhile you just become so weak that anyone can just walk all over you. It happens with all nations but it takes a long long time.

So in short, we'll stumble along for awhile and eventually go the way of the dinosaur.

[zolace]

Well, all these stories tend to end the same...with the country being taken over. I think the more important question is what that timeline is. In my honest opinion, we are probably further out from "the end" to the point where you or I will not be around. With that said, we certainly will have some big declines within the next 20-40 years. Currently 100% of the revenue generated goes towards paying old people, paying sick people, paying interest on debt, and paying people to XXXX up and/or rebuild another country. At the state level, another 25% of the revenue goes towards helping sick people. Unfortunately, you get to a point where you aren't just helping people who need it, you are creating a small work force with a large entitled force. Slowly this degrades the economy, you end up with huge disparities in income, and the nation begins to cave in on itself. Take a look at Greece and most of the EU as an example of where we will be in 20 years. After awhile you just become so weak that anyone can just walk all over you. It happens with all nations but it takes a long long time.

So in short, we'll stumble along for awhile and eventually go the way of the dinosaur.

Think we'll actually make it another 20 years like this? I'd be all too happy if we somehow could manage that. I expect changes in our level of technology to bail us out if we can manage to make it that far. I just suspect the problem is much more imminent.

[umair127]

Well, all these stories tend to end the same...with the country being taken over. I think the more important question is what that timeline is. In my honest opinion, we are probably further out from "the end" to the point where you or I will not be around. With that said, we certainly will have some big declines within the next 20-40 years. Currently 100% of the revenue generated goes towards paying old people, paying sick people, paying interest on debt, and paying people to XXXX up and/or rebuild another country. At the state level, another 25% of the revenue goes towards helping sick people. Unfortunately, you get to a point where you aren't just helping people who need it, you are creating a small work force with a large entitled force. Slowly this degrades the economy, you end up with huge disparities in income, and the nation begins to cave in on itself. Take a look at Greece and most of the EU as an example of where we will be in 20 years. After awhile you just become so weak that anyone can just walk all over you. It happens with all nations but it takes a long long time.

So in short, we'll stumble along for awhile and eventually go the way of the dinosaur.

Think we'll actually make it another 20 years like this? I'd be all too happy if we somehow could manage that. I expect changes in our level of technology to bail us out if we can manage to make it that far. I just suspect the problem is much more imminent.

We'll easily make it another 20 years. They won't be great years, but the United States will exist. Besides, we gotta wait for a few other countries to fully collapse before we go down that road. Believe it or not, others are ahead of us.

[wassupman]

Prophet John Paul Jackson on the next Ten Years in America
http://sidroth.org/television/tv-archives/john-paul-jackson

[wasserman99]

Well, all these stories tend to end the same...with the country being taken over. I think the more important question is what that timeline is. In my honest opinion, we are probably further out from "the end" to the point where you or I will not be around. With that said, we certainly will have some big declines within the next 20-40 years. Currently 100% of the revenue generated goes towards paying old people, paying sick people, paying interest on debt, and paying people to XXXX up and/or rebuild another country. At the state level, another 25% of the revenue goes towards helping sick people. Unfortunately, you get to a point where you aren't just helping people who need it, you are creating a small work force with a large entitled force. Slowly this degrades the economy, you end up with huge disparities in income, and the nation begins to cave in on itself. Take a look at Greece and most of the EU as an example of where we will be in 20 years. After awhile you just become so weak that anyone can just walk all over you. It happens with all nations but it takes a long long time.

So in short, we'll stumble along for awhile and eventually go the way of the dinosaur.

Think we'll actually make it another 20 years like this? I'd be all too happy if we somehow could manage that. I expect changes in our level of technology to bail us out if we can manage to make it that far. I just suspect the problem is much more imminent.

We'll easily make it another 20 years. They won't be great years, but the United States will exist. Besides, we gotta wait for a few other countries to fully collapse before we go down that road. Believe it or not, others are ahead of us.

It will likely take a lot more then 20 years for any empire like the US to collapse.

Also the fact that we have, by far the strongest military in the world, we could easily invade a resource rich country, and start to sell their resources for our own benefit.

[zolace]

Prophet John Paul Jackson on the next Ten Years in America
http://sidroth.org/television/tv-archives/john-paul-jackson

Interesting link . I'm not one to put much faith in faith. But that's a debate for another thread

I guess there aren't as many people here concern with the possibility of our nation going bankrupt as I thought there would be. Or maybe there are and they just aren't sure what to believe about how soon we could see such a collapse or what a collapse would entail.

[transient858]

Well, all these stories tend to end the same...with the country being taken over. I think the more important question is what that timeline is. In my honest opinion, we are probably further out from "the end" to the point where you or I will not be around. With that said, we certainly will have some big declines within the next 20-40 years. Currently 100% of the revenue generated goes towards paying old people, paying sick people, paying interest on debt, and paying people to XXXX up and/or rebuild another country. At the state level, another 25% of the revenue goes towards helping sick people. Unfortunately, you get to a point where you aren't just helping people who need it, you are creating a small work force with a large entitled force. Slowly this degrades the economy, you end up with huge disparities in income, and the nation begins to cave in on itself. Take a look at Greece and most of the EU as an example of where we will be in 20 years. After awhile you just become so weak that anyone can just walk all over you. It happens with all nations but it takes a long long time.

So in short, we'll stumble along for awhile and eventually go the way of the dinosaur.

I will be a lot faster this time as information travel fast and transportation technology now allow an entire industry to move offshore in a matter of months.

If you think this will take 20 years, it will probably be over in 5 years.

[sana8410]

Though I fully realize how tempting it is to exaggerate the US debt issue, our debt is certainly not unresolveable. The range of solutions is simply sufficiently politically unpalatable, especially in the current political climate, that major fixes would not be put into place until the problem becomes acute. Some of the solutions include:

- Letting all Bush tax cuts expire. We did just fine with those tax rates in the past, we can again, while significantly helping the budget

- Pinning Social Security and government pension payment increases to cost of living increase, while gradually increasing the age of full benefits to 70.

- Reducing Medicare costs by having people take up some part of the burden or placing some limits on care, as private insurers do. This is contraversial since it means that some might be deprived of lifesaving procedures at the end of their lives. However, with medical developments and up to millions of dollars in medical expenses, one can often extend a persons life by, say, another year. The question we have to ask ourselves is how much public money we are willing to spend as a society to keep someone alive for another year - an average of $100,000? $1 million? I say this with full understanding that my care could be rationed someday as well.

- Assess the range of potential dangers to the US, along with benefits of US influence, and scale military spending appropriately, or let it grow more slowly with time.

- Other tax or spending reforms

Anyway, there are many potential answers (including many not listed). The problem with nearly all of them is that they require sacrifice, so they are politically unpalatable by one side or the other.

[leezay]

Though I fully realize how tempting it is to exaggerate the US debt issue, our debt is certainly not unresolveable. The range of solutions is simply sufficiently politically unpalatable, especially in the current political climate, that major fixes would not be put into place until the problem becomes acute. Some of the solutions include:

- Letting all Bush tax cuts expire. We did just fine with those tax rates in the past, we can again, while significantly helping the budget

- Pinning Social Security and government pension payment increases to cost of living increase, while gradually increasing the age of full benefits to 70.

- Reducing Medicare costs by having people take up some part of the burden or placing some limits on care, as private insurers do. This is contraversial since it means that some might be deprived of lifesaving procedures at the end of their lives. However, with medical developments and up to millions of dollars in medical expenses, one can often extend a persons life by, say, another year. The question we have to ask ourselves is how much public money we are willing to spend as a society to keep someone alive for another year - an average of $100,000? $1 million? I say this with full understanding that my care could be rationed someday as well.

- Assess the range of potential dangers to the US, along with benefits of US influence, and scale military spending appropriately, or let it grow more slowly with time.

- Other tax or spending reforms

Anyway, there are many potential answers (including many not listed). The problem with nearly all of them is that they require sacrifice, so they are politically unpalatable by one side or the other.

Senior citizens are the only group of people who go out to vote.

So it will actually be easier to execute all senior citizens than do what you listed above.

But you are on the right track, half of the debt problems will be gone if someone manage to cut the entitlement program.

[zolace]

Though I fully realize how tempting it is to exaggerate the US debt issue, our debt is certainly not unresolveable. The range of solutions is simply sufficiently politically unpalatable, especially in the current political climate, that major fixes would not be put into place until the problem becomes acute. Some of the solutions include:

- Letting all Bush tax cuts expire. We did just fine with those tax rates in the past, we can again, while significantly helping the budget

- Pinning Social Security and government pension payment increases to cost of living increase, while gradually increasing the age of full benefits to 70.

- Reducing Medicare costs by having people take up some part of the burden or placing some limits on care, as private insurers do. This is contraversial since it means that some might be deprived of lifesaving procedures at the end of their lives. However, with medical developments and up to millions of dollars in medical expenses, one can often extend a persons life by, say, another year. The question we have to ask ourselves is how much public money we are willing to spend as a society to keep someone alive for another year - an average of $100,000? $1 million? I say this with full understanding that my care could be rationed someday as well.

- Assess the range of potential dangers to the US, along with benefits of US influence, and scale military spending appropriately, or let it grow more slowly with time.

- Other tax or spending reforms

Anyway, there are many potential answers (including many not listed). The problem with nearly all of them is that they require sacrifice, so they are politically unpalatable by one side or the other.

Let's take a look... $300 billion a year in savings first year ...Savings of $0 first year to $67 billion by 2022 assuming you also increase the age for Medicare. I'll assume $33 billion in savings for my calculation.

[zolace]

This is impossible to measure and not possible to implement anyway. People already take up some of the burden of medicare. Limits on benefits are now illegal under the health care act and even before that it never reduced costs overall (but did for the insurer). More importantly, no one knows what the "last year of life" is until they are dead; and then it is too late to go back. Multiple studies show a large portion of expenditures go towards last year of life for those in their 60s. Often times, the thought is they will survive, and many do, since they are not that old yet. So if you have a 60 year old with prostate cancer do you treat them knowing that it is expensive but they have a good chance to live another 20+ years?

The money spent on people whom we KNOW are going to die any day now is actually not that much in comparison; it is mostly hospice care expenditures (for Medicare that is). I'm not sure what the alternative proposed is...put them on the street? Force the next closest relative to take them?

This is why government should stay out of these kinds of things...or at least federal...OR suck it up and do it like they do is Switzerland.

Savings = $0

[zolace]

- Assess the range of potential dangers to the US, along with benefits of US influence, and scale military spending appropriately, or let it grow more slowly with time.

Unfortunately scaling back the military kills huge numbers of jobs. This is what happens when you make a country dependent on government...all the eggs are in one basket. I'll give you the benefit of the doubt and assume we can cut the military by 40% no questions asked (a very generous assumption). $280 billion in savings.

- Other tax or spending reforms

Not specific enough to judge.

Totals Savings: $613 billion/year

You did better than most. You are coming up about $1.4 trillion short though. Maybe $1 trillion assuming the economy gets better.

Anyway, there are many potential answers (including many not listed). The problem with nearly all of them is that they require sacrifice, so they are politically unpalatable by one side or the other.

No one is saying it is impossible to balance the budget; we are saying it is impossible congress will actually act before it gets so bad that we implode.

[sana8410]

- Assess the range of potential dangers to the US, along with benefits of US influence, and scale military spending appropriately, or let it grow more slowly with time.

Unfortunately scaling back the military kills huge numbers of jobs. This is what happens when you make a country dependent on government...all the eggs are in one basket. I'll give you the benefit of the doubt and assume we can cut the military by 40% no questions asked (a very generous assumption). $280 billion in savings.

- Other tax or spending reforms

Not specific enough to judge.

Totals Savings: $613 billion/year

You did better than most. You are coming up about $1.4 trillion short though. Maybe $1 trillion assuming the economy gets better.

Anyway, there are many potential answers (including many not listed). The problem with nearly all of them is that they require sacrifice, so they are politically unpalatable by one side or the other.

No one is saying it is impossible to balance the budget; we are saying it is impossible congress will actually act before it gets so bad that we implode.

Though I don't have the time to go through all the numbers and, as I mentioned, this was only a partial list of fixes, I will say that, though Congress does wait with major fixes until the problem becomes acute, it does act once it is acute enough. Meanwhile, it does seem willing to often make smaller improvements. For example, as a generation Xer, I cannot retire with full benefits until I am 67.

[umair127]

- Assess the range of potential dangers to the US, along with benefits of US influence, and scale military spending appropriately, or let it grow more slowly with time.

Unfortunately scaling back the military kills huge numbers of jobs. This is what happens when you make a country dependent on government...all the eggs are in one basket. I'll give you the benefit of the doubt and assume we can cut the military by 40% no questions asked (a very generous assumption). $280 billion in savings.

- Other tax or spending reforms

Not specific enough to judge.

Totals Savings: $613 billion/year

You did better than most. You are coming up about $1.4 trillion short though. Maybe $1 trillion assuming the economy gets better.

Anyway, there are many potential answers (including many not listed). The problem with nearly all of them is that they require sacrifice, so they are politically unpalatable by one side or the other.

No one is saying it is impossible to balance the budget; we are saying it is impossible congress will actually act before it gets so bad that we implode.

Though I don't have the time to go through all the numbers and, as I mentioned, this was only a partial list of fixes, I will say that, though Congress does wait with major fixes until the problem becomes acute, it does act once it is acute enough. Meanwhile, it does seem willing to often make smaller improvements. For example, as a generation Xer, I cannot retire with full benefits until I am 67.

Which is fine for most problems but things like debt are easily fixed when the problem becomes "acute". Debt is one of those things that when the problem has to be addressed, you can't. It's how almost all major empires have collapsed. The Roman Empire being a classic example.

Lucky for us, we are years away a "sacking of DC".

[odolvlobo]

- Assess the range of potential dangers to the US, along with benefits of US influence, and scale military spending appropriately, or let it grow more slowly with time.

Unfortunately scaling back the military kills huge numbers of jobs.

Scaling back the military kills huge numbers of unproductive jobs. If you put those people to work doing productive things instead, everybody will be better off.

[Robert Paulson]

it will be utter chaos, similar to how the soviet union went bankrupt.
once the government is unable to pay the salaries of the military and police and simultaneously the government welfare/pension checks stop coming it could get ugly.
although at this point most people in America are such obedient pussies that i doubt there will be much violence, they will just take it quietly.

[galbros]

This is similar to another thread.  The key idea is that it never has to end.  THe UK still has some debt that dates from Napoleonic Wars!

See this post from the other thread.

Of course, no reason to assume the US will convince investors to always roll over their debt....

[itsAj]

- Assess the range of potential dangers to the US, along with benefits of US influence, and scale military spending appropriately, or let it grow more slowly with time.

Unfortunately scaling back the military kills huge numbers of jobs.

Scaling back the military kills huge numbers of unproductive jobs. If you put those people to work doing productive things instead, everybody will be better off.

Both military and defense industry related jobs are actually incredibly productive. The weapons that are created by defense related companies are able to save thousands (if not millions) of lives and can do incredible damage to our enemies. These weapons also can deter others from even thinking about attacking us.